Every allowable expense you claim reduces the profit you pay tax on — so keeping good records genuinely puts money back in your pocket. As a self-employed driver, your biggest cost is usually the vehicle, and how you claim for it is the single most important choice. Here's what you can claim, what you can't, and the one decision to get right.
How expenses work
You pay Income Tax and National Insurance on your profit — your income minus your allowable business expenses — not your total income. An "allowable" expense is one incurred wholly and exclusively for your driving work. If something is part business, part personal (your phone, say), you only claim the business share. This sits inside your Self Assessment tax return.
The big one: your vehicle — two methods
You can claim for your van or car in one of two ways. You generally have to pick one method per vehicle and stick with it for that vehicle:
1. Simplified mileage
Claim a flat rate per business mile instead of working out actual running costs. The standard rates are 45p per mile for the first 10,000 business miles in the tax year, then 25p per mile after that (cars and vans). It covers fuel, servicing, insurance and wear and tear — so you don't claim those separately. Simple to track: you just need a reliable mileage log.
2. Actual costs
Claim the real running costs for the business-use proportion — fuel, insurance, road tax, repairs, servicing, MOT — plus capital allowances on the vehicle itself. More paperwork, but often better if you do high mileage or run an expensive vehicle.
You can't mix the two for the same vehicle — it's mileage or actual costs. Work out which gives the bigger claim before you commit, because once you use one method for a vehicle you usually keep it.
Other expenses you can usually claim
- Hire and reward / goods in transit insurance (if claiming actual costs)
- Parking and toll charges while working (not fines)
- Mobile phone — the business-use share of your bill
- Protective clothing and equipment — hi-vis, safety boots, straps, trolley
- Accountancy or bookkeeping fees
- Bank charges on a business account
- Use of home as office — a proportion of costs, or HMRC's simplified flat rate, for admin you do at home
- Trade subscriptions and relevant training
What you can't claim
- Parking or speeding fines — never allowable
- Everyday clothing — only genuine protective gear or uniform
- The personal-use share of any cost — phone, vehicle, etc.
- Food — generally not, unless on a genuine overnight trip away from your normal pattern
- The full cost of a vehicle in one go if you're using the mileage method (it's included in the rate)
Keep records — it's the whole game
HMRC expects you to keep records of income and expenses, and you may need to show them. The essentials:
- A mileage log (date, route, business miles) if using the mileage method
- Receipts and invoices for everything you claim
- Your weekly self-billing invoices as your income record
A separate bank account and a simple app or spreadsheet make the tax return painless. With FlexiDriver, self-billing invoices are raised on your behalf each week, so your income side is documented automatically.
This is general guidance, not tax advice. Rates and rules change each tax year — check the current figures on gov.uk, and consider an accountant if your situation is more complex.
The bottom line
Claiming the right expenses can meaningfully cut your tax bill — and the vehicle method is where the biggest difference is made, so work that out first. For the wider picture on registering and filing, see self-employed driver tax: UTR, Self Assessment & expenses. Ready to pick up shifts? Register to start earning with FlexiDriver.